He said the year under review had seen very high activity, with aggregate value of acquisitions and sales exceeding £450 million.

At the year end the group's development programme had an estimated value on completion in excess of £500 million, compared to £260 million the previous year. Shareholders were told that the group's stronger balance sheet now enabled it to access larger projects which bring greater economies of scale. The average project size has increased from £8 million last year to £10 million at the year end.

Halladale added that it expects strong investor demand to continue to support the UK property investment market, although it believes that there is limited scope for further hardening of yields.

It also said it believes that the office sector, particularly in London and the South-east, will provide better prospects for rental growth over the next couple of years and it is continuing to identify attractive opportunities in that sector.

Halladale added that the likely introduction of REITS in January 2007 will provide significant opportunities for the UK property industry and it is an area they are looking at with interest.